Transcription
Shell CEO Wael Sawan issued a warning last week that almost nobody paid attention to. He said Europe could face fuel shortages in April, not May, not summer, April. We are now in April and the warning is coming true. 900 gas stations in France have run out of at least one type of fuel. Multiple petrol stations in the UK have closed after operators reported aggressive behavior from customers fighting over remaining supplies. Slovakia is implementing emergency measures. The Netherlands is reporting shortages and this is just the beginning.
Shell CEO was specific about the timeline. He said the fuel crisis would hit South Asia first, then Southeast Asia, Northeast Asia, and then more so into Europe as we get into April. That timeline is playing out exactly as predicted. The Philippines declared a state of national energy emergency on March 24th. Singapore's government ordered employees to work from home. Myanmar restricted private vehicle use to alternate days and now Europe is running dry.
But here is what almost nobody understands. This is not a temporary panic. This is a structural supply crisis with a very specific cause and it is about to get much worse. The last pre-war tankers from the Gulf arrived in Europe this week. The ones that were loaded before Iran closed the Strait of Hormuz on March 4th. Once those cargoes are unloaded, the pipeline runs dry. There are no more tankers coming. Europe is about to find out what happens when 20% of global oil supplies disappear overnight.
And if you are watching this from the United States, do not think you are immune. Gas prices in America hit $4 per gallon on March 31st for the first time since 2022. Some parts of California are paying over $6. Diesel crossed $5 nationally and analysts are warning prices could reach $4.50 within 2 weeks. This is happening right now. I am going to walk you through exactly what is unfolding, why it matters, and what comes next.
Let me start with Europe because that is where the crisis is most acute. France is the clearest example of what is happening across Europe. Let me give you the specific data. As of April 2nd, 900 gas stations in France have run out of at least one type of fuel. 700 of those belong to Total Energies, France's largest energy company. Other estimates suggest up to 1600 sites may have experienced temporary shortages. The French energy ministry is blaming logistical issues rather than a national supply shortage, but that explanation does not hold up. This is not a logistics problem. This is a supply problem.
Diesel prices in France reached record highs of around 2 euros and 25 cents per liter. That is approximately $2.45 per liter or over $9 per gallon. The French government imposed price caps to protect consumers. This triggered panic buying. Drivers rushed to fill their tanks before prices climbed further and that panic buying drained remaining supplies. Total Energies extended its cap on gasoline and diesel prices at stations across mainland France until April 7th. The company said traffic across its network increased sharply since mid-March, warning of localized supply tensions, particularly for diesel. French government spokeswoman Maud Bregeon tried to downplay the crisis. She said less than 10% of stations were affected and there is no risk of supply shortage. France still holds around 100 million barrels in strategic reserves, she noted. But strategic reserves are emergency measures. The fact that the government is even mentioning them tells you how serious this is.
The United Kingdom is facing similar problems. British supermarket chain Asda, the nation's second largest fuel retailer, acknowledged that demand has surged significantly, resulting in some pumps running dry at select stations. Multiple petrol stations in the UK have closed after operators reported aggressive behavior from customers. Allan Leighton, Asda chairman, said, "Supply is tight and we are all doing our best to address it." The UK government is preparing for possible intervention. Journalist Louisa James reported that experts had warned of a severe shortage of oil and gas within weeks.
Shell CEO warned specifically that jet fuel would be affected first, followed by diesel, and finally gasoline ahead of the summer driving season. Aviation kerosene prices in Europe have already hit record highs of $1,900 per ton. Ryanair CEO Michael O'Leary warns of 5 to 10% flight cancellations. He said the UK is most vulnerable. United Airlines CEO Scott Kirby sent an email to employees on March 21st saying the company will be canceling some flights as it prepares for higher oil prices. He wrote, "Our plans assume oil goes to $175 per barrel and doesn't get back down to $100 per barrel until the end of 2027." Let me repeat that. United Airlines is planning for oil at $175 per barrel through the end of 2027. That is not a short-term disruption. That is a fundamental restructuring of the energy market.
Slovakia has moved beyond warnings. The country has already implemented emergency fuel measures. Across Europe, the pattern is the same. Hundreds of petrol stations reporting shortages, some running dry completely. The problem is not confined to specific regions but spread across countries. Common fuels like Super 95 are affected along with alternatives such as E85 and autogas. The European gas storage situation makes this worse. European gas storage is at 30% capacity, historically low levels. This follows a harsh 2025-2026 winter that depleted reserves. Dutch TTF gas prices, the European benchmark, have nearly doubled to over 60 euros per megawatt hour by mid-March. The European Commission advised member states on March 26th to fill their gas storages early to avoid price spikes later in the year. European Central Bank officials have warned that a prolonged conflict will likely trigger stagflation and push major energy-dependent economies, including Germany and Italy, into technical recession by the end of 2026. This is not speculation. This is the official position of the European Central Bank.
Now, let me explain why this is happening and why it will get worse. Here is the fundamental problem. Tankers loaded at Gulf ports before the Strait of Hormuz was closed take between 3 and 5 weeks to reach European shores. The Strait of Hormuz was effectively closed on March 4th. That means the last tankers that loaded before closure left around late February or early March. 3 to 5 weeks from early March puts their arrival in Europe in early to mid-April. We are now in early April. Those final pre-war cargoes are arriving this week and after they dock and unload, there are no more coming. According to Bloomberg sources, April will hold, May will not.
Let me explain the structural problem with European refineries that makes this crisis even worse. Europe has 66 mainstream refineries with a primary capacity of 567.4 million tons per year, but since 2009, the European refining sector has lost 154.8 million tons of capacity. Why? Because European refineries are squeezed between sky-high energy costs, emissions taxes from the EU emissions trading system, and competition from mega plants in Asia and the Middle East. The International Energy Agency predicts Europe could lose an additional 1.5 million barrels per day of refining capacity by 2030.
But Europe's real problem is not just capacity, it is the mismatch between what refineries produce and what the market consumes. When you refine a barrel of crude oil, you get fixed percentages of different products, light distillates like gasoline, middle distillates like diesel and kerosene, and heavy distillates. You cannot easily change these ratios. The European market has undergone massive dieselization over decades. In 2023, diesel accounted for 63.7% of energy consumption in road transport. This happened because European governments set lower taxes on diesel compared to gasoline to encourage freight transport and fuel efficiency, but European refineries cannot physically produce all this diesel without simultaneously generating huge volumes of gasoline. So Europe is a major net exporter of gasoline. In 2022, Europe exported 46.3 million tons of gasoline, often to the United States and Africa. At the same time, Europe is chronically short of diesel. To compensate, in 2022, Europe imported 16.7 million tons of oil equivalent of diesel from third countries. Where did that diesel come from? The Middle East, specifically refineries in the Gulf that could export through the Strait of Hormuz. That supply is now gone.
Europe needs diesel to power trucks, non-electrified trains, agricultural tractors, and shipping. Europe needs kerosene to keep airports operational, and Europe cannot produce enough of either without importing from the Gulf. The analysis from Senari Economici, an Italian economic research outlet, predicted that diesel shortages would result in sharp price rises starting in the second week of April. Not actual shortages initially, but prices rising so high that diesel becomes unaffordable for many users. Trucks, trains, and agricultural equipment all run on diesel. When diesel becomes unaffordable, freight costs spike. When freight costs spike, everything gets more expensive. Food, manufactured goods, construction materials, everything.
This is not a problem that strategic petroleum reserves can solve. Strategic reserves are crude oil. You still need refineries to turn that crude into diesel and kerosene, and European refineries are already running at capacity trying to produce enough diesel from the crude they can access. The only solution is to import diesel from outside the Gulf, but global diesel supply is tight. The United States uses most of its diesel domestically. Asia is experiencing its own shortages. There simply is not enough surplus diesel in the world to replace what Europe normally imports from the Gulf. Shell CEO Wael Sawan described this as a ripple effect. The fuel crisis started in South Asia. It moved to Southeast Asia, then Northeast Asia, and now Europe. Each region absorbs whatever spare fuel it can find, leaving less for the next region in line, and Europe is at the end of that line.
Now, let me show you what this means for the United States. The United States produces as much oil as it consumes. It is the largest oil producer in the world. Many Americans assume this means the US is insulated from global oil shocks. That assumption is wrong. On March 31st, 2026, the national average price for regular gasoline in the United States crossed $4 per gallon for the first time since August 2022. According to AAA, the national average reached $4.01 per gallon. Mid-grade averaged $4.54. Premium averaged $4.90. Diesel averaged $5.45. One month earlier, on February 28th, the day the war started, the national average for regular gasoline was $2.98. Gas prices increased more than $1 per gallon in 1 month. That is a 35% increase.
Patrick DeHaan, head of petroleum analysis at GasBuddy, said crossing $4 per gallon breaches a psychological wall. Americans associate $4 gas with economic crisis. The last time gas was consistently above $4 was during the peak of inflation in 2022. But DeHaan warns prices have nowhere to go but up. He said retail gasoline prices in the US could surge to $4.25 to $4.45 per gallon in the next 2 weeks at the current pace. Some regions are already well above the national average. In Los Angeles, gas prices exceeded $6 per gallon. California's statewide average is around $4.50.
Why is the United States, an oil exporter, experiencing these price increases? Because oil is a global commodity. The price Americans pay at the pump is determined by global oil markets, not just domestic production. Crude oil alone accounts for more than 50% of what consumers pay at the pump. Brent crude, the international benchmark, surged from around $70 to $80 per barrel before the war to over $110 currently. West Texas Intermediate, the US benchmark, is trading in the mid-$100 range. The United States cannot insulate itself from this price shock, even though it produces enough oil domestically.
Why? Because over the past decade, the US built massive infrastructure to link domestic supply to overseas markets. The US became a major oil exporter. This means US oil producers sell to the highest bidder globally. When global prices spike, US producers export more oil overseas, where they can get higher prices. This reduces domestic supply and pushes US prices up toward global levels. Additionally, even though the US produces crude oil, it imports refined products. The US refining sector has undergone consolidation. Several refineries have closed in recent years, particularly in California. Phillips 66 closed its 147,000 barrel per day Los Angeles refinery in October 2025. Valero is scheduled to shut its 145,000 barrel per day Benicia refinery in April 2026. These closures cut California's refining capacity by 292,000 barrels per day, approximately 17% of the state's total refining capacity. The Energy Information Administration projects West Coast prices will rise to $4.19 in 2026, up from $4.09 in 2025, while the national average falls to approximately $3. One worst-case analysis predicted California gas could hit $8 per gallon by 2026 if refinery capacity losses create severe supply shortages. California cannot easily source replacement fuel from other states because of shipping limits and California's special fuel formulation requirements. The state requires a specific gasoline blend for environmental reasons that most other states do not produce.
The Trump administration has taken emergency measures to try to contain prices. On March 12th, the administration released 172 million barrels from the Strategic Petroleum Reserve. This is part of a coordinated effort by more than 30 nations to inject 400 million barrels into the market to address the supply shock. The administration waived the Jones Act for 60 days. The Jones Act requires US-flagged ships to transport goods between domestic ports. Waving this rule allows foreign vessels to deliver oil and gas within the US, potentially reducing transportation costs. However, analysts note this will primarily help the West Coast and Northeast, not other regions. The EPA extended emergency fuel waivers to allow the sale of higher ethanol gasoline blends, normally prohibited in summer due to smog concerns. Energy Secretary Chris Wright told CNBC the administration has plans to increase diesel supply. He said, "We do have some ideas on diesel that we can bring extra diesel to the marketplace." But these are all short-term measures. They do not address the fundamental supply problem. The Strait of Hormuz remains closed. 20% of global oil supplies remain offline, and there is no indication Iran will reopen the strait anytime soon.
The economic ripple effects in the United States are already visible. Amazon announced it is adding a fuel surcharge to e-commerce deliveries. This means consumers will pay more for online orders. Mortgage rates have risen to their highest level in 7 months as investors price in higher inflation and potential interest rate hikes. Shipping costs on key routes have risen by up to 30%. Insurance premiums for vessels have doubled or tripled in some cases. Airlines are cutting flights and raising ticket prices. United Airlines is planning for oil at $175 per barrel through the end of 2027. In the first week after the war began, the average price of gasoline in the United States increased 48 cents per gallon. That was the largest weekly increase in decades. David Doyle, head of economics at Macquarie Group, said the average monthly gas price in March is expected to be 25% higher compared with February. This would mark the largest monthly increase dating back to October 1990. Andy Lipow, president of Lipow Oil Associates, told clients the consumer has already seen the sticker shock from rising gasoline prices and increased airline ticket prices from the rising cost of jet fuel. However, the full effects of the higher diesel prices has yet to be felt, and that will flow through the economy over the next few months. Patrick DeHaan from GasBuddy warned, "This is really quickly going to ignite additional inflation." By April, consumers will see higher prices at supermarkets and for online orders as diesel price increases flow through the supply chain.
Now, let me show you what is happening in the rest of the world. The Philippines declared a state of national energy emergency on March 24th. Initially, Philippine officials downplayed the situation. On March 23rd, Palace press officer Claire Castro said the Philippines was facing price disruption, but not yet a crisis. One day later, President Marcos declared an emergency. The Philippines imports 98% of its oil from the Middle East. When the Strait of Hormuz closed, it endangered the country's entire energy supply. The Philippines is heavily dependent on oil for electricity generation, transportation, and industry. The government created a crisis committee to ensure economic stability. Government offices in the Philippines are now working only 4 days per week to conserve fuel.
Singapore, despite being a major refining hub, is experiencing shortages. Singapore's refineries on Jurong Island process up to 1.5 million barrels of crude per day. They receive crude oil mostly from the Middle East and produce refined products for export around the Asia Pacific region. But those crude supplies are now cut off. The Singapore government directed people to raise their air conditioning temperatures and reduce clothing to lower energy consumption. All government agency employees are working from home to reduce fuel use. Myanmar restricted private vehicle use to alternate days. The country is lacking in refineries and relies on oil products imported from Thailand, Vietnam, and Singapore. There are long queues at petrol stations.
Indonesia, although an oil producer itself, imports around a third of its supply. The largest economy in the region, Indonesia keeps a fuel reserve of around 22 days. Japan holds oil reserves for 254 days. On March 16th, the government of Japan started releasing 80 million barrels of oil, equivalent to 15 days of domestic demand from its strategic reserves. As of February 2026, 94.2% of Japan's crude oil imports came from the Middle East. South Korea holds reserves for 208 days. Energy Minister Kim Sung-hwan said the country would not experience problems with supply for over a year. However, the Korean government launched an energy saving campaign encouraging citizens to take brief showers and limit use of washing machines. New Zealand released six days worth of petroleum on March 12th following a global directive by the International Energy Agency. On March 27th, New Zealand released a four-level fuel alert system. The country was placed on the first phase, watchful, with the public advised to use fuel cautiously. Australia is experiencing fuel price spikes driven partly by panic buying. Hundreds of petrol stations reported fuel shortages. The government said fuel deliveries are assured until mid-April. But mid-April is now. What happens after mid-April?
In Africa, the impacts vary by country. Nigeria is a major oil producer. Its large Dangote refinery has increased production to help meet world shortages. However, ordinary Nigerians still experience rising transport costs. South Africa sources most of its fuel from Saudi Arabia. The government said there is no shortage, but prices have increased and some petrol stations have introduced rationing of diesel.
The pattern is clear. Every region is experiencing either shortages, price spikes, or emergency government interventions. In many cases, all three simultaneously. The International Energy Agency described this as the largest supply disruption in the history of the global oil market. That is not hyperbole. In terms of barrels removed from global trade, this exceeds the 1970s oil embargo, the 1990 Gulf War, and the 2011 Libyan Civil War. And the crisis is still escalating.
Let me walk through the specific timeline of what to expect in the coming weeks. April 4th through 10th, Europe experiences accelerating fuel shortages as the last pre-war tankers are unloaded. Bloomberg sources said April will hold. We are testing that prediction right now. Expect reports of more gas stations running dry across France, UK, Netherlands, and Germany. Mid-April, Australia's fuel deliveries, which the government said are assured until mid-April, run out. New Zealand faces similar timeline. Both countries will need to secure alternative supplies or implement rationing. April 11th, the US Treasury waiver on Russian oil sanctions expires. This waiver, issued on March 12th, allowed purchase of sanctioned Russian oil already loaded on vessels. The waiver was supposed to last 30 days. If not renewed, it eliminates one source of marginal supply that was helping ease the crisis. Second week of April, according to the Scenario Economici analysis, this is when diesel prices in Europe rise sharply. Diesel will be available, but at much higher prices. This is when freight costs spike and flow through to consumer prices. Late April into May, Bloomberg sources said May is when Europe really struggles. The last pre-war cargoes will be exhausted. Europe will be entirely dependent on whatever alternative supplies it can secure from non-Gulf sources. Airlines begin major flight cancellations. Ryanair already warned of 5 to 10% cancellations. If kerosene shortages worsen, that figure could rise. United Airlines is planning for sustained high oil prices through the end of 2027. May, California potentially faces severe supply disruptions, according to JP Morgan analysis. The West Coast relies heavily on imports and the April closure of Valero's Benicia refinery removes significant refining capacity just as alternative Gulf supplies are unavailable.
Throughout this period, there are three possible scenarios that could change the trajectory. Scenario one, diplomatic breakthrough, Iran agrees to reopen the Strait of Hormuz. Tankers begin loading again in the Gulf. However, even in this optimistic scenario, there is a three to five-week lag before those tankers reach Europe. So, even if a deal were reached today, Europe would still face shortages through early to mid-May. Scenario two, partial reopening. Some shipping resumes through the strait under negotiated terms. Iran allows certain cargoes through while maintaining pressure. This eases the crisis, but does not resolve it. Prices remain elevated. Shortages persist in some regions. Scenario three, prolonged closure. The war continues, the strait remains closed, and the crisis deepens. Oil prices potentially reach $150 to $200 per barrel. Gasoline in the US reaches $6 to $7 per gallon nationally. Europe faces actual fuel rationing, not just high prices. Airlines cancel 20 to 30% of flights. Economic recession becomes virtually certain. Current indications suggest scenario two or three are most likely.
President Trump said on April 1st that he expects operations in Iran to wrap up in 2 weeks, maybe three. But he has made similar statements before that proved inaccurate. On March 10th, Trump said the war was very complete, pretty much. That was 3 weeks ago. The war is still ongoing. Yesterday, April 3rd, Iran shot down a US F-15 fighter jet. That does not suggest a war that is winding down. Israeli Prime Minister Netanyahu said the war has achieved more than half its aims, but refused to put a timeline on when it would end. He said, "It's definitely beyond the halfway point, but I don't want to put a schedule on it." Iran has shown no indication of agreeing to reopen the Strait of Hormuz. The strategic calculus for Iran favors keeping it closed. Every day the strait remains closed, global oil prices stay high. This generates revenue for Russia, Iran's ally. It creates economic pain for the United States and Europe, and it demonstrates Iran's ability to disrupt global energy markets. From Iran's perspective, reopening the strait would be surrendering their most effective leverage. So, the most realistic expectation is that shortages and high prices continue for weeks or months, not days.
Now, let me address what this means economically and strategically. This fuel crisis is not just about gas prices, it is about the structure of the global economy and the vulnerability of energy-dependent systems. Europe is facing potential deindustrialization. Chemical and steel manufacturers have already imposed surcharges of up to 30% to offset surging electricity and feed stock costs. If these companies cannot afford to operate, they shut down. And once industrial capacity shuts down, it does not easily restart. Germany and Italy, the two largest manufacturing economies in Europe, are facing technical recession. The European Central Bank's warning about stagflation is becoming reality. Low growth combined with high inflation. The worst possible macroeconomic environment. The fertilizer crisis, which I have covered in previous videos, is being made worse by diesel shortages. Fertilizer production requires natural gas as a feed stock and diesel to transport fertilizer to farms. Both are now expensive and scarce. This sets up a food price crisis in the second half of 2026.
Central banks are paralyzed. Higher fuel prices drive inflation. Normally, central banks would raise interest rates to fight inflation. But raising rates during an economic slowdown causes recession. If central banks do nothing, inflation erodes purchasing power. There is no good option. The World Trade Organization said if oil and gas prices remain high for the rest of the year, it could reduce forecasted 2026 growth in global GDP by 0.3%. That may sound small, but on a global scale, it represents hundreds of billions of dollars in lost economic output. For individual countries, the impact is much larger. The WTO estimated Europe could see GDP grow at least 1% less than previously expected. Goldman Sachs put the probability of recession at 30%. Moody's recession model is at 49%. If the war continues, Goldman Sachs said recession probability could jump to 60%.
This is all happening while global debt levels are at record highs. Governments borrowed heavily during COVID. Many have not yet returned to fiscal balance. Now they face lower economic growth, higher interest costs, and political pressure to help citizens cope with energy costs. The political implications are significant. High energy prices are politically toxic. Every government facing elections in the next year will be under enormous pressure. In Europe, this is fueling debate about energy policy, Russian sanctions, and defense spending. In the United States, high gas prices could affect the November midterm elections.
And there is one more dimension that almost nobody is discussing. This crisis is a preview of what happens when the world's energy system experiences a major shock. For decades, global prosperity has depended on cheap, reliable energy flowing from the Middle East through a few key choke points like the Strait of Hormuz. This war has exposed how fragile that system is. One regional conflict, one closed waterway, and the entire global economy is thrown into crisis. The long-term lesson is that energy security requires either diversification of supply sources, reduction of demand through efficiency and alternatives, or both. Europe has been trying to transition to renewable energy, but that transition is not happening fast enough to prevent this crisis. The United States has domestic energy supplies, but is still vulnerable to global price shocks because it participates in global markets. No country is truly energy independent in a globalized economy, and that reality is becoming painfully clear right now.
Europe's fuel shortage is here. It is not coming. It is happening now. 900 gas stations in France are out of fuel. The UK is experiencing shortages and panic buying. The last pre-war tankers are being unloaded this week, and after that, the pipeline runs dry. The United States is experiencing its own crisis. $4 gas nationally, over $6 in parts of California, diesel above $5, and predictions of further increases in the next 2 weeks. Asia has been hit hard. The Philippines declared a national energy emergency. Singapore ordered work from home. Myanmar is rationing fuel. Shell CEO warned this would happen. He gave a specific timeline. South Asia first, then Southeast Asia, Northeast Asia, and Europe in April. That timeline is playing out exactly as predicted.
The question now is how long this lasts. If the war ends and the Strait reopens, there is still a 3-5 week lag before supplies normalize. If the war continues, this crisis deepens into something much worse. Europe could face actual rationing. The United States could see gas at 5, 6, or $7 per gallon. Airlines could cancel a significant percentage of flights. Economic recession could become virtually certain. This is the reality of a 21st century energy crisis. It does not develop over years. It develops over weeks. And once it starts, stopping it requires either resolving the underlying conflict or finding alternative supplies that may not exist.
We are 48 hours into the period Bloomberg said Europe could not sustain. The next few weeks will show whether Europe can secure enough fuel from non-Gulf sources to avoid severe shortages, whether the United States can keep prices from spiraling further out of control, and whether this crisis triggers the broader economic recession that economists are increasingly warning about. This is not a drill. This is not speculation. This is happening right now.